Obama to Propose New Measure to Reduce Spending

Mike Allen at Politico reports that President Barack Obama will unveil the Reduce Unnecessary Spending Act of 2010, a presidential check on Congressional bills.

Under this new expedited procedure, the president would submit a package of rescissions shortly after a spending bill is passed. Congress would be required to consider these recommendations as a package, without amendment, and with a guaranteed up-or-down vote within a specified timeframe. The White House bills this as part of a larger effort the president has undertaken to rein in wasteful spending…. This expedited rescission authority would replace Part C of the Impoundment Control Act of 1974 — the line-item veto provisions struck down by the Supreme Court in 1998.

But the new proposal comes at the same time that members of Congress — Republicans and Democrats both — are pressing for spending cuts and pay-go provisions. Lori Montgomery and Shailagh Murray report in the Washington Post:

“It’s time to start paying for things,” said Rep. Kathy Dahlkemper (D-Pa.), a freshman who voted for last year’s economic stimulus bill but said she is likely to oppose the next spending package, scheduled to hit the House floor Tuesday. “We’ve done some good things, but one of the best things we could do right now is get control of our fiscal house.”

With the national debt at its highest level in nearly 60 years, the question of whether to cut spending — and if so, how — is pitting liberals against conservatives, and Congress against the president. The White House has proposed a three-year freeze in programs unrelated to national security and warned House leaders Friday that it might go further, targeting the Defense Department for cuts. Meanwhile, House leaders unable to agree on a long-term budget blueprint are considering other ways to signal fiscal toughness, including a one-year budget plan that would cut 2011 spending even more deeply than Obama’s freeze.

“We’re going to adopt that and may go farther,” said Rep. Chris Van Hollen (D-Md.), a member of the House leadership.

Of course, having both the White House and Congress devising ways to slash government spending and cut benefits has economists worried. Consumer demand remains soft, and unemployment sky high. Until the economic cycle is virtuous and the turnaround clearly self-sustaining, the government reducing its budget could be disastrous. Someone needs to be spending for businesses to start hiring again, and if it is not the consumer, it needs to be Uncle Sam.